Blog: Dean BestThey've got their just desserts for milking UK farmers

Dean Best | 7 December 2007

The UK retailers and dairy firms at the centre of the price-fixing storm in the sector have responded to news of their GBP116m (US$235.2m) fines in a considered manner.

Sainsbury’s and Robert Wiseman Dairies spoke of their “disappointment” at the fines, while Asda dolefully mentioned its “regret” about the affair.

All three said they had colluded to fix the price of milk, butter and cheese to bolster the incomes of cash-strapped farmers, a stance supported by Dairy Crest, which will also be fined.

This afternoon, however, the head of a dairy producer not caught up in the collusion slammed the decision to fine the companies.

Richard Clothier, MD of cheese maker Wyke Farms, said the Office of Fair Trading had “got it wrong”.

“At that time, without substantial price rises, this country was at risk of being in a situation where dairy commodities become rationed due to short supply,” Clothier said.

“The OFT's job is to act in the interests of the consumer and a shortage of food, particularly staple items such as dairy is certainly in the interests of no one. The 'fair trade' approach has to apply to home supplied goods and this has clearly not happened here.”

The protestations from the retailers and dairy processors that they were trying to help farmers are understandable.

However, at that time, farmers were quitting milk production in droves, tired of not being able to make a reasonable return – or even cover costs – from selling their milk.

Perhaps if farmers had been paid a decent price in the first place, the supermarkets and dairy processors wouldn’t have to resort to such under-hand tactics.


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